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Consider a 8.60 percent coupon bond with twelve years to maturity and a current price of $953.90. Suppose the yield on the bond suddenly increases by 2 percent.
1. Use duration to estimate the new price of the bond.
2. Calculate the new bond price.
What is the sustainable growth rate of a firm with the selected financial results?
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An investor currently holds the following portfolio: If the risk-free rate of return is 4% and the expected market return is 13%, then the required return on the portfolio is
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Assume that you purchase an 8 percent semi-annual, 20-year, $1,000 par bond, priced at $1,012.50, when it has 12 years remaining until maturity. What is the bond’s approximate yield-to-maturity (YTM)? What is the bond’s actual yield-to-maturity (YTM)..
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